The Brexit HBR Business Case

Today we’re going to work through a strategic business case to evaluate how you’re likely to perform in role.

Investment Case

You have an initial investment of £50-60B to make that will have an impact in the £100s of Billions over decades. The transformation will completely distract your Executive Team and all your senior managers leaving you unable to do anything else except the project. Once initiated the project cost will be sunk and the company irreversibly comitted to the course.

All of your consultants have advised you against initiating the project. Your competitors, sensing a misstep have started to hire your most trusted staff. You have a tenuous grip on your board and e-team and expect to lose some critical board votes that will secure the project.

You’re certain you don’t have the staff to manage the initial analysis let alone the deployment of the project.

A year ago you asked your staff if they’d support you in the project. A very small majority said they would, but your confidence is low in their understanding of the issues and risks involved.

Your Options

In this situation do you:

A) Ruthlessly identify and then evaluate all the options, creating a strong business case for the expenditure, a deep and structured plan to implement including any additional analysis to ensure you’re making the right decision.

B) Reject the case completely and pursue alternative options, it’s unlikely you can create a case in this situation and will likely irreparably damage the company.

C) Make it up as you go along from day to day with a completely unprepared team, a hostile market and half your workforce actively fighting you on strategy? Just for the wild ride you also decide to commit yourself to a hopelessly ambitious timetable in order to provide an incentive for the team to focus. And before you get the project underway you wildly over-claim the benefits.

Your proposal

Answer this case as if you were spending your own money and then choose one of the options. You should be able to propose a simple rationale for your choice in no more than a single paragraph.

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9 Replies to “The Brexit HBR Business Case”

As a director, in this circumstance, I would demand management produce clear and unambiguous failure standards for the first stage of the project in the expectation that these would not be met. Then when management failed to meet the standards, I would press the board to fire the management and pursue a merger with a management that understood how to manage.

Tell lies. Claim to have some reports which are i excruciating detail, but refuse to show them to anyone. Insist dirtiness to back you. Tell more lies, each one more preposterous than before. Make sure you take as much money into your own hands as you can. Before going bust. Refuse to pay any taxes owing. Claim your management is a great success.

I’m afraid the premise is ludicrous. If people ran companies as if they were spending their own money, we wouldn’t need to have companies. The only reason companies exist is to transfer the risk to capital to society at large, and companies should (and mostly are) run with that in mind. For that reason, the three hypothetical responses are also ludicrous.

For that reason, also, the options for managing change are more nuanced, and the optimal solutions dependent less on precedent or theory than on where the plan comes from.

If it comes from a major shareholder, or even a disruptive activist, the only option is to delegate ruthlessly, outsource anything that will go immediately wrong and schedule a few informal chemistry meetings with the better sort of head-hunter.

If it’s sprung from a rival enterprise, the likelihood is that they’re hoping to force you into a position which they can exploit through a buy-out. In that case, the best thing to do is prepare a few distractions, line up some scapegoats and make clear, unchallenging overtures to their management. If your loyalties are in the right place you will be rewarded with, at the very least least, a few senior roles amongst their subsidiaries.

That might sound like demotion, but as each subsidiary easily outweighs your whole current enterprise, it will provide better rewards and less scrutiny. Which is, if you’re honest with yourself, is what you were aiming for in the first place.

No. Although I find the Brexit charades amusing, I don’t find Brexit itself very funny. That’s because I don’t for a moment believe Brexit has come about simply because the grumbling rump of the Referendum Party twitched into sufficient life to scare the Tories. There must be more to it than that, and the revelations from Carole Cadwalladr et. al, about the shadowy webs of vested interests and ‘dark money’ behind the vote suggest that Brexit goes much further than the spivvish bluster about ‘taking back control’ of things we’ve control over already.

The trouble is we don’t know why Brexit is happening. All we know is that traditionally opposing parties are, for no obvious or justifiable reasons, both dead set on going through with it, ostensibly because a slender majority of an ill-informed electorate said so in an advisory referendum. That doesn’t seem plausible to me. But, as I tried to suggest, until we know the motives, we can’t see what the motives really are, or who and what we’re defending against.

I can think, off the top of my tinfoil hat, of several possibilities. We know there are vast amounts of corporate and personal capital doing nothing but waiting for opportunities, so perhaps the vulture funds have got ambitious enough to tuck into a nation. Perhaps Qatar wants to cut Norway out of the UK gas market to gain leverage with an influential friend over it’s jostling neighbours. Perhaps China wants a strategically-placed dumping ground for its goods and produce. Perhaps there’s a grain of truth in one or more of these. Perhaps there isn’t. But whichever way I look at it, Brexit looks nothing like a brainchild. It looks far more like a merger or acquisition.